Oh if only TurboTax had a button for “traveling the world with no income”…
But I digress, one of the more stressful 3 or so hours of our trip was trying to figure out how to file our taxes with no permanent residence whatsoever in the United States. Yes, we lived and worked in Texas (one of the few states with no state tax, yay!) but we had opened up a virtual mailbox that had an address in North Carolina and we had updated our credit card mailing addresses. For tax purposes, were we Texas residents, North Carolina residents, or both?!
A quick note about virtual mailboxes (also known as travel mailboxes) before we dive in. For $10-15USD per month, you lease a mailbox somewhere in the US so that you can continue to receive credit cards OR important tax documents! They’re an especially good option if let’s just say you don’t want to move all your addresses to your parents (maybe they’re seriously questioning your life decisions…) but you still want to receive your mail. Here’s a link to the one we use!
Okay, so here’s what you need to know. Setting up a virtual mailbox does NOT establish your residency in that state. If so, everyone would own a virtual mailbox in Texas, Washington or any other states without state income tax, right? A good rule of thumb is that your state of residence is wherever your drivers license is from. Take me, for example, I have a Texas drivers license and made all my money in Texas prior to taking off on this trip. So even though my virtual mailbox has a North Carolina area code, I only need to file taxes in Texas.
For your address on your tax documents, use your most recent apartment/home address since it is where you lived when you were making money in the US. Do not click the “You have moved” life change button on TurboTax as you technically have not moved anywhere new in the US.
One more thing of note to help smooth your tax filing experience, before you leave your past or soon-to-be-past employer confirm where they will send you tax documents – specifically your W2.
Hopefully soon TurboTax will catch up with us millennials and our crazy life choices, but until then, I hope these tips help you wrap up your taxes quickly and painlessly so you can get back to figuring out where you’re going to stay, how long you’re going to stay there, what you’re going to do next, or any of the other pressing decisions you need to make today!
There your have it, our tax tips for traveling without an income! From us to you, happy adventuring! For more on practical tips on long term travel, check out our comprehensive guide on How to Prepare for a Yearlong Trip!
NOTE: I am not a CPA. This post is all based on my experience trying to file taxes while traveling abroad without any income. I hope you found this useful, but, as always, do your own research and don’t take this as gold. Trust but verify!